Questions
- Explain why you chose the particular graphs or charts that you did. How do the graphs or charts you created help someone understand the financial information from your personal financial analysis? Why are they better than other graphs you considered creating?
I used Pie charts for my graphical representation. Pie charts are better than bar graphs because of its simplicity and ease of understanding it for every individual as bar graph is complex and hard to understand. I also used the bar graph to represent my trip’s expenses as pie chat is smaller in size. By using the Pie Chats and Bar graphs someone can easily understand what each category is, how much each category contributes to the total amount, and how much of the total amount is from those categories. Pie charts are more visual and catch people attention. Bar graphs are also a better choice for showing an amount as Pie chats will be smaller in size and it does not show the percentage at all. If a pie chat is used for representing amount then it will be difficult to make it small in size as the detail of the expenses should be included in the pie chat to make it understandable.
According to my personal financial analysis, I need to control my expenses as there are changes in budget for healthcare in month two and additional costs on transport in month three. There is an increase in salary from month one to month 3, but there is an increase in spending on healthcare and transport. I need to keep track of my expenses and make sure that I spend within my budget. I will also monitor my progress through the use of pie chats to help me understand where I stand in comparison with the budgeted expenses and increase more on savings every month.
- Explain the results of your financial analysis, including overall progress toward savings goals, potential changes in your budget that can be made in the future, and possible economic or life impacts that may affect your budget in the coming year.
I decided to keep track of my expenses in pie charts and bar graphs. The pie chart shows the amount of my expenses by categories, how much money I spent on each category and how much is left for the next month. In comparison with the pie chart, bar graph shows how much I spent in total and how much I have left for next month. If we look at the pie chart it shows that there is an increase in transportation expense in month 3 which is due to increase in salary from Month 1 to Month 3. The next months we can see that there is an increase again on transportation expense as well as from other category expenditure. Savings is not increasing although salary is increasing but income is not. The bar graph shows the total amount spent on different categories. From comparing both pie chat and bar graph we can see that the total expenses increased from Month 1 to Month 2 as well as from Month 2 to Month 3 in transportation, health care and other category expenditure but savings decreased from month 1 to month 3.
- Project how your financial analysis will look in one year. Take into account economic concepts and trends.
- What economic concepts might be relevant (income growth, inflation, consumer prices, et cetera)?
Income growth, price inflation and consumer prices are important economic concepts that affect the forecast of my budget. Income growth is important to project long-term budgeting because it refers to increases in pay or other income received. Price inflation and consumer prices are also important when forecasting my budget because it affects my expenses such as health care, transport and others. The increase in price of my education expense is a big concern for me because I need to pay for the children’s school fees every year. Inflation and consumer prices will affect the amount of money that I need to pay for my education expense.
I will keep track of every expense in pie charts, bar graphs, and a written budget to project how my financial analysis will look in one year. My future budget is an important expenditure planning tool because it helps me compare actual income and expenses with my long-term plans. I will evaluate the appropriate use of a monthly budget and if needed, adjust the figures in my long-term forecast. With a monthly budget, I can also forecast my expenses for each month on a semi-annual basis. I will keep this tool up to date by updating the budget every month and making necessary changes to reflect increases and decreases in expenditures from previous months, as well as unforeseen circumstances. For example, if my boss requires me to work overtime, I estimate how much extra money I will need for overtime payments. After projecting my expenses for the next year, I would revise my assumptions about salary increases and inflation. To ensure accuracy of future projections, I would compare them with data from the government or other sources of reliable information on economic trends.
Also, I will update my assumptions about the cost of living in each location I might relocate to. My budget will change as my financial analysis shows a clear trend of increasing expenses every month which are two categories healthcare and transport. I will keep track of these expenses in pie charts and bar graphs so that I can assess whether my current assumptions about expenses are realistic. Budgeting is a constant process and I will keep the budget updated every month and make necessary changes. I will also consider changing my long-term financial forecast if it does not align with my actual expenses.
- What economic trends might you want try to account for when making your projection?
The economic trends are generally things like inflation and economic growth. When planning my future budget I would need to forecast how much my salary will increase and find out if there is any other expenses that can affect my budget. I will forecast the monthly expenses to be sure that I can complete on time the necessary transportation expense, health care expense and other category expenses.
Economic processes and trends as reflected in the above project would enable me know whether or not it is feasible for me to plan my future budget or not. In addition, it will allow me to plan my future budget and see if the actual income that I receive will be able to support my long-term savings goals. My future long-term forecast is an important expenditure planning tool because it helps me compare actual income and expenses with my long-term plans. I will evaluate the appropriate use of a monthly budget and if needed, adjust the figures in my long-term forecast. My goal is to develop and maintain a realistic budget plan to achieve my savings goals. Other threats to the economy such as political unrest, economic sanctions and other events like the financial crisis may have a huge impact on my budget.
These threats will affect long-term forecasts and my ability to save. It therefore depicts the need for a comprehensive range of budget and cost management tools to increase the transparency of future budgets. A lot of what I do in my analysis and planning would be slightly different from other people. The financial forecast is based on the information that I gather. I need to use a lot of resources such as the internet to research for the data that will use in my forecast. The need for a comprehensive range of budget and cost management tools to increase the transparency of future budgets. It also depicts the need for a comprehensive range of budget and cost management tools to increase the transparency of future budgets. If there are any future changes in the prices of education expense, it will affect my planning and budgeting for the next year because one way or another, I have to pay for the children’s school fees every year, so price inflation will have an impact on my budget plan.
- How could you try to plan for unexpected expenses when making your projection?
I will make the necessary changes in my budget if required. I will keep track of every expense in pie charts, bar graphs and a written budget to project how my financial analysis will look in one year. My future budget is an important expenditure planning tool because it helps me compare actual income and expenses with my long-term plans. I will evaluate the appropriate use of a monthly budget and if needed, adjust the figures in my long-term forecast.
From my personal financial analysis, I need a budget plan that is free from unexpected hazards and gives me good visibility on my expenses. There are some changes in budget for healthcare in month two and additional costs on transport costs in month three, but there is a significant increase in salary. During month one I plan to implement strict saving rules for myself so that I can complete as much saving as possible before leave this country. In addition, i will use the pie chats to monitor my personal savings, expenditure and income currently and compare with previous months to see if i have increased or decreased. More savings in month one will help me achieve my savings goals. Budget plan will help me to achieve my long-term goals. The economic process and trends as reflected in the above project would enable me know whether or not it is feasible for me to plan my future budget or not. My future long-term forecast is an important expenditure planning tool because it helps me compare actual income and expenses with my long-term plans. I will evaluate the appropriate use of a monthly budget and if needed, adjust the figures in my long-term forecast. I will evaluate how my budget compares with my cost plan in order to be sure that I am on track with my savings goals. With a yearly budget, I will be able to make the necessary changes if required.
